TELUS released its financial results this morning, rounding out 2014 reporting season for the major wireless carriers [Rogers reported two weeks ago and Bell’s results came out last week].
All three reported an increase in ARPU – average revenue per user – as more customers added data plans with smartphones.
But the number that I want to explore is churn. Churn is a measurement of how many customers choose to leave the company each month – it is a good proxy for customer satisfaction. Happy customers are less likely to leave their current service provider.
With the old 3-year contracts, on average, nearly 3% of your customers had contracts come due each month. Under the CRTC’s Wireless code, there are effectively no contracts anymore. Well over half of Canada’s wireless customers can leave their service provider without penalties. Many stay with their service providers for 2 years, the maximum period for amortizing their smartphones. That means about 2% of these customers are shopping each month.
As reported in the Globe and Mail, TELUS reported churn of just 0.94% for the last quarter (0.93% on the year); Bell had 1.3% and Rogers 1.46%.
On a base of 8.1 million customers, the difference in churn means that TELUS lost about 40,000 fewer customers each month. That is 120,000 customers per quarter. Customers that generate an average of almost $65 per month in revenue.
Last year, when describing the Customer Experience Management panel at The Canadian Telecom Summit, I wrote “It pays to be nice“. TELUS reported that its cost of acquisition – money spent for each new customer – was $440.
TELUS said: “TELUS’ low blended churn rate reflects the Company’s successful customers first service approach, investments in customer retention as well as a greater proportion of postpaid clients in TELUS’ subscriber base.”
It pays to invest in delivering an improved customer experience. Once again, The Canadian Telecom Summit will explore this, during panel discussions. The Canadian Telecom Summit takes place June 1-3 in Toronto. Early bird savings are available through February 28. Have you registered yet?